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Kraken rethinks IPO
Does Coinbase’s modest direct listing performance make emerging crypto platforms think twice when listing? The latest comments from the major cryptocurrency exchange Kraken may hint at this.
In an interview with CNBC earlier this year, Kraken CEO Jesse Powell shared that the company is considering a direct listing in 2022. Less than a month later, Coinbase went public, and now only a few months after its debut on Wall Street, Powell may reconsider.
IPO…I don’t know
Kraken is the top three exchange Rank by quantity, And continue to grow. However, the future of Kraken in terms of public listing is still a question mark. Powell recently appeared in the “Balanced Ledger” video series of “Fortune” and said that the company is working harder to consider listing, especially in terms of direct listing.
“Given the performance of direct listings, IPOs look more attractive,” Powell said. “I want to say that we are now taking it more seriously because we can see how direct public offerings can work for Coinbase.”
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Coinbase’s struggle since its direct listing
In just a few months, Coinbase’s initial valuation dropped by about one-third, and it went public at a price of more than $68B, and its current valuation is slightly less than $48B. The company has been in business for nearly a decade, and there is no doubt that it remains confident in its long-term success. In addition, the company is paving the way for other cryptocurrency-focused companies to follow suit. However, the company’s direct listing method seems to keep investors vigilant. In Powell’s view, this may be an “observation and learning” experience for some of the largest public-facing cryptocurrency companies considering listing.
Since going public via direct listing in April, it's been a steady slide for Coinbase. | Source: $COIN-NASDAQ on TradingView.com
Can Kraken crack the password?
Despite seeing struggles on Coinbase stock, and backed by the not-so-excellent earnings report released for the first time, CEO Brian Armstrong believes that a direct listing is appropriate. Armstrong told CNBC in April that a direct listing “is more in line with the spirit of cryptocurrency.”
Powell of Kraken doesn’t think so. “I think [Wall Street] Bound by the traditional way of doing things,” Powell said in a recent appearance. Despite this, Powell did not take any approach in terms of direct listing or IPO-but he did rule out a “hot” public channel: SPAC or Special Purpose Acquisition Companies. For emerging companies (such as the crypto startup Circle), SPAC has always been an increasing topic and rumors.
It remains to be seen what approach Kraken and other emerging cryptocurrency companies will take, but rest assured, they are paying close attention to the market forces at work.
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